Poor complaints handling results in additional impact and leads to higher remedies Background Mr G instructed the service provider to help him purchase a house. Mr G became concerned when the property did not complete on the agreed date and so raised his concerns with the service provider. Mr G was concerned about both the delay in completion and general delays in the transaction. He was also concerned about the service provider’s communication, both with himself and the seller’s solicitors. As a result, Mr G raised a complaint with the service provider, seeking a partial refund of fees due to the delays and communication failings. Complaints The complaints Mr G raised fell into three broad categories: Delay – Mr G complained that there was a delay in completion, caused by the service provider, as they did not provide all necessary information to his lender. Communication – Mr G also complained about the number of updates he received during the transaction, saying he felt “kept in the dark”. He also said he did not receive responses to his emails, or requests for information. In addition to Mr G’s concerns, he said that the seller’s solicitor had also experienced communication difficulties. Costs information – Mr G also complained that he was charged more than the original quote and was not informed of this change. The service provider failed to respond to Mr G’s complaints and only provided a response when informed of the complaint by the Legal Ombudsman (LeO). The service provider explained that their business model is that separate staff deal with aspects of the transaction, and that communication is electronic and via an app. The service provider explained that they accepted some communication may have not been at the level Mr G expected. They also explained that the delays, at least in part, were due to issues in the wider chain. The service provider offered £300, in light of both their poor complaints handling and their communication failings. The Legal Ombudsman’s view and approach When a complaint is received by LeO with no final response, the first step in our process is to request a response. In this case, the service provider had not originally provided a response but did so as soon as they were notified that the complaint had been passed to LeO. Importantly the service provider apologised for the failing in the complaints handling and offered an enhanced remedy to address this The complaint was then reviewed and was passed to the Early Resolution Team on the basis the service provider’s offer was reasonable. Whilst Mr G was seeking a fee reduction, his transaction did complete and so there was no impact on the value of the service he received. It is also the case that even if there were some issues with the costs information provided, that does not mean the service provider cannot make those charges if they were legitimately incurred. Therefore, a payment for impact was the appropriate remedy here. The offer of £300 falls into the significant category and is in line with what we would direct if we were to uphold all of the complaints being raised by Mr G, including the service provider’s poor complaints handling. LeO’s Early Resolution Team explained this to Mr G and he was content to accept the outcome on that basis and the complaint was closed as an agreed outcome. As the complaint was resolved at Early Resolution no case fee was payable by the service provider. LeO Insights Service providers should make clear their approach to managing transactions and communications at the outset of a retainer, which could reduce the likelihood of a complaint being raised. Where service providers are not fully responsible for the delays, they should ensure customers are kept reasonably informed of what is happening, which again may reduce the potential for complaints to arise. Where a service provider’s complaint handling is poor, there is a greater impact on the complainant, and so this will require an additional remedy for any offer to be considered reasonable.
Service providers should take account of customers’ knowledge and experience when communicating Background Miss H instructed the service provider to help her buy her first house. Miss H complained to the service provider after she completed as the transaction took longer than she felt it should have because there were periods of time where the service provider took no steps to move matters forward. Complaints The complaints Miss G raised fell into two broad categories: Delay – Miss H complained about delays with the transaction and stated she incurred two months’ extra rental payments because of the service provider’s delays, following a change in case handlers. Communication – Miss H also complained about poor communication. In particular, she said the service provider failed to meet her expectations in terms of the level of communication because she was a first-time buyer and so needed things explained to her. Miss H additionally complained that the service provider was difficult to get hold of on the phone and that her instructions were not promptly followed. The service provider failed to reply to Miss H’s complaint and did not engage with the Legal Ombudsman when asked for a copy of their complaint response. The Legal Ombudsman’s view and approach As the service provider did not reply to Miss H’s complaint, this case was not suitable for early resolution and was passed to an in-depth investigation. The case was allocated to an investigator, who contacted the parties to agree the complaints and explore whether the service provider accepted there were service failings and, if so, whether it was prepared to make an offer to resolve the complaint. In this case the service provider accepted that their communication had been poor and that they had directly caused an avoidable delay of a month. As a result, the service provider offered as a goodwill gesture to pay Miss H a remedy of one month’s rent to resolve her complaints about the delay and communication service failings. The Legal Ombudsman would only direct payments for financial loss where the impact flows directly from the service failing. It is very unlikely that we would direct additional rent or mortgage payments as we would need to evidence that the transaction would certainly have completed sooner. However, in this case the service provider accepted their failings, and wanted to try to put things right for Miss H. Miss H accepted the service provider’s offer, and the case was resolved as an agreed outcome. As the service provider’s service and complaints handling were both unreasonable, a case fee was chargeable in this case. LeO Insights Service providers should take account of what they know about their customers – for example, whether they are a first-time buyer – when seeking to manage expectations. Service providers should, where possible, consider their capacity to complete work when taking on an instruction. Delays are often caused by staff turnover, so where possible service providers should consider putting in place systems to manage this. Service providers should always issue a final response and seek to resolve complaints at the earliest possible opportunity. Complaints where a service provider issues a response, and where appropriate, accepts there is a service failing and makes a suitable offer to resolve that, are much more likely to be resolved at first tier and, if escalated, passed to LeO’s Early Resolution Team.
Service providers should consider the transaction type when advising on timescales Background Mrs R instructed the service provider to help her buy a leasehold flat. Following completion of the purchase, she raised concerns about the time taken to complete given that there was no chain. Mrs R also raised concerns about communication and information provided to her. Mrs R was unhappy with the service provider’s response to her complaint and escalated her complaint to the Legal Ombudsman as she was buying the property following difficult personal circumstances and wanted larger financial compensation than that offered by the firm. Complaints The complaints raised by Mrs R fell into two broad categories: Delay – Mrs R complained that the purchase took 19 weeks instead of 6-8 as she expected, and that the firm delayed in sharing information from the management company. Communications – Mrs R also complained that her communications to the firm were not responded to, or that there were delays in those responses. Mrs R told the firm that she found the situation very stressful because of her personal circumstances. The service provider provided a timely response to Mrs R’s complaint and included a chronology of the transaction. The service provider accepted that some of their communications were unreasonable, and that the transaction had taken longer than expected. However, they also explained that many of the delays were down to third parties. The service provider offered Mrs R £100 to resolve her complaints. The Legal Ombudsman’s view and approach The complaint was reviewed upon receipt and passed to the Early Resolution Team, on the basis that the service provider’s offer was reasonable and as a result no further remedy was needed. Mrs R wanted additional compensation, and to put the service provider’s service failings on record. Her complaint was therefore passed to an Ombudsman for a decision on whether the complaint should be dismissed on the basis that the service provider’s offer was reasonable. The firm’s offer of £100 is within the Legal Ombudsman’s bracket for a modest award. Whilst Mrs R found the purchase stressful, that was at least in part due to her own personal circumstances, rather than as a result of the firm’s actions. The purchase did complete and therefore the offer made by the service provider, considering all the circumstances of the complaint, was reasonable. The complaint was therefore dismissed. As the complaint was resolved at Early Resolution no case fee was payable by the service provider. LeO Insights Service providers should take account of the nature of the transaction, for example if it is a leasehold, when providing a likely timescale for completion. This better manages customer expectations and is likely to lead to fewer complaints. Providing information about the key stages in any transaction at the outset of a retainer, in particular those key points where the service provider may have to wait for third party information (e.g. searches, or management packs), results in more informed customers, and potentially reduces customer contact. Buying a house is inherently stressful, and so remedies directed by the Legal Ombudsman will only reflect the impact of any service failing on the part of the firm.